Veteran Silicon Valley Developer Accuses Facebook of Bully Tactics

Talent and product deals have been heating up for Facebook over the past six months. But now things are getting really interesting.

Dalton Caldwell, a Silicon Valley veteran whose past experience includes co-founding iMeem and PicPlz, has posted an accusatory account of his recent negotiations with top Facebook executives: Caldwell says Facebook told him they offered to buy an app and service he was building, implying they would “destroy [his] business” if he didn’t sell.

Facebook declined a request for comment.

A bit of context: Caldwell spent the past year building his application for the Facebook Platform via his App.net start-up. He says that over the course of that time he was assured by Facebook’s developer relations employees that, when Caldwell was ready to launch the product, he would get top-level support for his application.

Problem was, Caldwell says his app was a competing product to something Facebook was already working on: App Center. And in the meeting, Facebook made it clear to Caldwell in no uncertain terms that this was the case. Intimating that Facebook would have no problem competing with Caldwell’s “interesting product,” Facebook offered him an alternative, Caldwell says: An “acqhire.”

“I said that if Facebook wanted to have a serious conversation about acquiring my team and product, I would entertain the idea,” Caldwell wrote in his post. “Otherwise, I had zero interest in seeing my product shut down and joining Facebook. I told your team I would rather reboot my company than go down that route.”

It would be great to hear what Marc Andreessen thinks about all of this, as he’s both a Facebook director and, via his VC firm, the lead investor in Caldwell’s start-up.

Andreessen Horowitz declined my request for comment.

As recently as last week, CEO Mark Zuckerberg stressed that Facebook wanted to be a home for third-party apps, essentially issuing a call to arms for any prospective developers considering creating a Facebook-connected application.

Facebook’s goal, in essence, is “to create the identity and social layer that all new apps can be built on,” Zuckerberg said.

But if Caldwell’s story is true, that paints a much different picture to Zuckerberg’s “come one, come all” attitude. Yes, Facebook wants you to build apps into its platform — unless, that is, your apps compete with Facebook’s vision going forward.

Caldwell says this is standard practice at Facebook: “Several other startup founders & Facebook employees have told me that what I experienced was part of a systematic M&A ‘formula,’” he writes.

Caldwell’s accusations brought up a mixed set of responses in a thread on the YCombinator online message board. As one user points out, Facebook’s “acqhire” offer could even be seen as gracious.

“I don’t understand what you think Facebook did wrong. They intend to enter this new space, using their technology and their people,” YCombinator message board member tjic wrote. “As a courtesy they offered to hire you / throw a lot of money at you. What would you have had them do instead? Not compete with you, because you’re a precious snow flake?”

The issue at large speaks to something that all developers face: Platform risk. Facebook and other platforms like it are potentially lucrative homes for developers looking for wide distribution of their applications. But if your app business is built into and strongly tied to platforms such as these, you’re at their mercy. Ask Zynga.

The ongoing saga with the Twitter platform is another great example of this. Twitter is in the midst of a platform shift in which the company intends to tighten restrictions on its developers and their use of Twitter’s data, potentially affecting countless numbers of app developers. As the situation remains up in the air, developers are now at a bit of a crossroads — will they continue to create Twitter-based apps, or will they depart for another platform?

Conveniently, Caldwell has another alternative. Thanks to his problems with Facebook and frustrations with Twitter, Dalton is raising funds for a new version of App.net, which he’s now building as a paid real-time application platform that is free of advertising — which, Caldwell claims, is the scourage of platforms like Twitter and Facebook.

As the competing platforms evolve, it remains to be seen whether he will prevail. Caldwell’s fundraising has reached only one-fifth of the $500,000 it needs with only 12 days to go.

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